Insurance Bill Offers Parity for Mentally Ill

"Every insurance carrier I've talked to sees this as opening up a tremendous difficulty," Katz said. "It's certainly clear . . . when someone needs medical treatment for a mental condition or when someone doesn't. But the vast majority of cases are in that gray area. Insurance premiums will go up for everyone in order to add this benefit."

The Congressional Budget Office has estimated that employers' health insurance expenses would rise by only 0.2% if the legislation becomes law. That represents a 90% reduction from the estimated cost of the original measure, CBO analysts said. An actuarial analysis underwritten by the American Psychological Assn. estimated that the additional financial burden would be even lower: 0.12%.

In case that projection proves too low, the Senate measure includes a provision exempting employers if their cost increase exceeds 1%.

The proposal's financial impact is limited because few people hit the annual and lifetime limits, said Ronald Bachman, a Coopers & Lybrand actuary who helped prepare the APA analysis.

Fewer than 0.5% of the millions of people whose insurance coverage would be affected by the Domenici-Wellstone proposal would wind up collecting bigger benefits, he said.

Times staff writer David Olmos in Los Angeles contributed to this story.